South Korean officials have given their approval to a proposition that seeks to modify the country’s Public Service Ethics Act to encompass virtual assets, including cryptocurrency.
Amendments Seek to Address Disclosure Gaps and Impose Stricter Regulations on Cryptocurrencies
The present legislation mandates Government officials to disclose their holdings of stocks, bonds, jewelry, gifted memberships, and other assets valued at over 1 Million Korean won, which is approximately $760. Nonetheless, the law does not as of now require the disclosure of digital assets.
The decision to amend the law comes in the aftermath of a scandal involving Kim Nam-kuk, a previous member of the South Korean Democratic Party. Kim is facing states of selling greater than $4.5 Million worth of cryptocurrency a year ago, shortly prior to an next law revision that would have imposed limitations on such transactions.
As a result to the states, Kim argues that he was not obligated to disclose his digital investment activities and claims that he did not sell off his holdings, which were reportedly around 800,000 Wemix coins ($4.5 million), but rather transferred them to another exchange.
Following that, Kim left the South Korean Democratic Party and became an independent as he prepared his defense.
To tackle the matter, the South Korean Government is in the procedure of formulating a revision to the present legislation. This amendment seeks to include digital assets, including digital currency, within the framework of investment disclosure requirements that already apply to other forms of holdings.
The objective is to address possible gaps in the existing law, which have been brought to attention through the observation that virtual assets are not as of now specified in the disclosed information pertaining to a lawmaker’s possessions. This intention has been outlined in an official Government notice pertaining to the proposed amendment.
The amendment proposition received the sub-committee’s approval on May 19, and it is slated to proceed through a final vote within a plenary session scheduled for May 25.
Throughout the previous year, South Korean legislators have been actively engaged in the oversight and regulation of digital currencies and associated assets, particularly in response to the tumultuous events surrounding the Luna and Terra (LUNA) blockchain’s collapse in May 2022.
In April 2023, a comprehensive regulatory package focusing on digital currencies was put forth, aiming to introduce more stringent consequences for offenses related to these digital currencies.
The proposed measures include augmented fines and the likelihood of sentences ranging from one year to life imprisonment, reflecting a company stance against such illicit activities.
South Korea’s Bold Step to Counter Cryptocurrency Laundering with Advanced Blockchain Tech Analytics
In a recent move targeting international cryptocurrency laundering, South Korea’s prosecution service is poised to acquire state-of-the-art blockchain tech analytics software. This innovative technology is expected to empower authorities to apprehend individuals involved in illicit activities using digital currencies across borders.
Equipped with these new tools, authorities intend to attract international digital currency platforms under similar scrutiny as their domestic counterparts, ensuring a harmonized approach to oversight.
This advancement represents a whole lot of stride towards a comprehensive and interconnected intend to combat financial crimes associated with digital currencies. By embracing cutting-edge blockchain tech analytics, South Korea positions itself at the forefront of the worldwide fight against cryptocurrency laundering on an international scale.
As South Korean prosecutors forge ahead with this groundbreaking initiative, anticipation builds around the bidding process to develop these cutting-edge tools, commencing these 30 days. With numerous contenders trying to shape future of the cryptocurrency tracking, the competition promises to be fierce.
The contractor chosen to attract this vision to life is faced with an exciting endeavor of delivering these groundbreaking tools by November. This will usher South Korea’s law enforcement capabilities into a transformative phase, enabling them to combat illicit activities associated with digital currencies in a whole new way.
Through this visionary move, South Korean authorities demonstrate unwavering commitment to curbing cryptocurrency exploitation and fostering an environment of enhanced regulatory oversight in the digital currency sector. This groundbreaking development underscores the government’s proactive stance in strengthening the stability of digital currencies.
Expanding its horizons, South Korea established a strategic partnership with the United States, laying the groundwork for collaborative efforts to bolster the digital currency and forex markets betwixt the two countries. This unprecedented alliance heralds a new era of cross-border participation, setting the stage for innovation and synchronized regulations in the rapidly evolving digital finance landscape.
South Korean Exchanges Raided in Lawmaker’s Digital Assets Investigation
Past week, the offices of two South Korean digital currency exchanges, Upbit and Bithumb, were raided by prosecutors in connection with an investigation involving lawmaker Kim Nam-kuk’s digital assets. The raid, conducted by a team from the Seoul Southern District Prosecutors Office, attempted to gather transaction records and other materials.
Kim, who reportedly operated his digital investment wallets on Upbit and Bithumb, resigned from his political party on May 14, just before the authorities’ raid. States against Kim relate to suspicious digital currency transactions he allegedly conducted while working on digital investment legislation in May and November of 2022.
In a Facebook post, Kim mentioned that he did not want to burden his fellow party members with the controversy surrounding his cryptocurrency dealings. He dismissed media reports as containing false facts and expressed his intention to reveal the truth.
Reports suggest that Kim liquidated over $4 Million in digital currency before the Financial Action Task Force enforced the “Travel Rule.” The lawmaker supported a bill that attempted to postpone the 20 percent financial resources profits tax on digital currencies from 2023 to 2025.
Kim argued that he did not cash out his digital assets but rather transferred them to another exchange, asserting that he was not obliged to report such activity.
Reports by Yonhap, Kim was informed to possess around 800,000 Wemix coins in 2021, amounting to approximately $4.5 million.
Bithumb, one of the exchanges allegedly involved in Kim’s funds, has faced scrutiny from local regulatory authorities over recent months. In December 2022, following accusations of embezzlement and stock price manipulation, the executive who held the largest shares in the exchange met an unfortunate destiny. Following that, in January 2023, regulatory authorities conducted raids on Bithumb’s offices.
These events are part of the broader crackdown on digital currency activities in South Korea. In April, the Bank of Korea was granted the authority to investigate cryptocurrency-related enterprises, allowing banks to request access to transaction data from local exchanges.
In addition, legislators passed an initial review of digital currency regulations proposals, granting the Financial Services Commission the power to investigate and supervise digital asset-related activities and recommending harsher sentencing guidelines.